Banks bi-passing SWIFT is no longer a pilot project. The first Japanese Bank owned by @sbigroup will Join @jpmorgan using DCJPY, a digital deposit currency token that uses blockchain, smart contracts and atomic settlement technology with “Partior”.
It converts deposits into tokens. These tokenized deposits will allow for low-cost, instantaneous remittances, in contrast to the unwieldy system in use at traditional banks. SBI Shinsei Bank will be the first Japanese bank to join the Partior network, which was established by J.P. Morgan and such other financial giants as Singapore's DBS Bank and Tamasek.
In an October 2021 pilot, Partior achieved end-to-end settlements between the U.S. dollar and the Singapore dollar in less than two minutes. Banks in the U.S., Europe, South Korea and the Middle East are also slated to participate.
SBI Shinsei Bank plans to use Partior to provide business clients with a tool for smoothly wiring funds overseas. SBI Shinsei Bank will also provide the Partior platform to partnering regional financial institutions, with the aim of supporting overseas remittances by the smaller banks.
The goal is to create an ecosystem that will accommodate rapid settlements around the clock throughout the year.
Conventional cross-border remittances rely on a network operated by the Society for Worldwide Interbank Financial Telecommunication (SWIFT). But this requires funds to be transferred through correspondent banks, adding to time and fees.
The global average cost of sending a $200 cross-border remittance came to 6.4% in the first quarter of 2024, according to a report that year from the Financial Stability Board.
Tokenized deposits are similar to stablecoins, but stablecoins show fluctuations like those seen in conventional foreign exchange markets. A stablecoin might trade at 99.9 cents instead of exactly $1, for example.
Tokenized deposits are considered easier to handle by businesses. Not only is the value of 1 DCJPY constantly pegged at 1 yen, but tokenized deposits are also treated as equivalent to conventional deposits at commercial banks.
Japan Post Bank also plans to roll out DCJPY for depositors in fiscal 2026. The bank looks to facilitate fast trades of blockchain-based financial products.
https://asia.nikkei.com/spotlight/cryptocurrencies/sbi-shinsei-bank-to-roll-out-digital-currency-for-rapid-fund-transfers
OP: Crypto Eri